Investopedia explains 'Peak-To-Valley Drawdown'
While declines in a fund's net asset value are inevitable, investors monitor the length of time it takes for the fund to recoup those losses. The shorter the recovery period, the better the fund's performance. The caveat here, however, is that the recovery from the drawdown should not be achieved by the fund manager taking on a significantly greater degree of risk to get a boost in performance.
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